Confusion and contradictions were apparent during a discussion in the Isle of Wight council chamber around a claim and counter-claim on savings of £700,000 from this year’s Isle of Wight council’s PFI budget.
Most notably because the Cabinet member, Cllr Ian Ward, said the savings had not been made, but the CEO, John Metcalfe, then said they had.
Brodie: Cuts for vulnerable people Vs PFI
At last week’s Cabinet meeting, Scrutiny Committee member, Cllr Geoff Brodie, questioned how the council could consider cutting £700,000 from the adult social care budget by changing how they charge vulnerable people for care, when they had failed to save £700,000 on the Highways PFI project (as stated in the 2018/19 budget papers – line 73).
The question had been raised two days before at the Scrutiny Committee, but had not been answered. Cllr Brodie asked,
“Are you in that position now, to give us an answer, why we are happy as a council to fail to deliver a £700,000 saving, whilst at the same time proposing an enormous, commensurable figure, as a pretty severe cutback in services for people with serious vulnerabilities?”
Ward: Government “oversees how it is used”
Cabinet member for Transport, Cllr Ian Ward, replied that they had started to look at the issue and it had not been ignored.
He added,
“The funding of the Highways PFI is a complex equation, quite unlike any other council budget that can be adjusted as required by the council. The PFI budget is tied to the Island Roads contract with the Isle of Wight council.
“The majority of the funds come from the government who oversee how it is used.
“To reduce this budget requires agreement of all parties and examination of the consequences of a possible reduction on the delivery of the contracted work.”
Ward: Claims saving was an “aspiration” from Indies
Cllr Ward then went on to claim,
“The current £700,000 savings in the budget was an aspiration from the last Independent administration, who could not make the saving.”
The budget saving of £700,700 from the PFI contract was actually set in 2017/18 budget under the Conservative administration (as they took over the council in January 2017), and not Island Independents as claimed by Cllr Ward. The last Island Independent budget was set in 2016/17.
Ward: £700,000 savings in one go “will probably be difficult”
Finishing his response to Cllr Brodie (who had specifically asked about savings in this year 17/18), Cllr Ward said,
“The Conservative administration has started a process to review the various corporate interests and the effect of reducing that budget may have on the refurbishment of the Island’s infrastructure.
“We hope this will be successful and that significant savings can be made, but to get £700,000 in one go, will probably be difficult, but we may be able to achieve that and perhaps more over time.”
Cllr Ward told OnTheWight that his reply given was from his own handwritten notes when we asked whether he’d written the text he read out.
Savings have been made
Then, contrary to what Cllr Ward and the budget papers claim, the council’s Chief Executive stated very clearly in the meeting that £700,000 savings had been made in the current financial year.
CEO, John Metcalfe, said,
“The savings were achieved in year [2017/18], £700,000 of savings were achieved from one-off savings that came out of the management of the contract and the application of the resolution in a number of contract dispute issues.
“However, we did require £700,000 year-on-year savings which has to come out of the base budget, that is why we still need to do further work in the next financial year to take that money out of the base budget.
“One of the difficulties, is in the complexity around re-negotiating the PFI contract and within some of those renegotiations we uncovered further things that need to be renegotiated and discussed which is added to the complexity, but we have made significant progress of over the last six months in resolving those issues.”
He finished by clarifying again that the savings had been achieved in that year, but were one-off savings, hence the need to find savings again in future years.
Ward: “I was referring to the coming year”
After the meeting OnTheWight contacted Cllr Ward to ask why he said savings had not been made, when the CEO claimed they had been. He replied,
“When I said ‘this year’ I was referring to the coming year (18/19).
“The information I was given was that the first attempt to make those savings was during the last administration.”
OnTheWight challenged him on this response as it directly contradicts what he said in the meeting when replying to a question about 2017/18.
Ward: “Perhaps I could have been more clear”
Cllr Ward got back to us stating that “Perhaps I could have been more clear”, adding that “There were savings made in 17/18, but they did will not meet the £700k target”.
He followed this up with a call confirming that he’d been to speak with the finance department.
They have advised that a saving of £700,000 relating to the PFI had been made this year (17/18), but that the money had not been saved in the areas intended (ie. something that could be an ongoing saving such as cutting back on services provided year on year).
£700,000 has been saved after all
The outcome of all this back and forth – trying to get to a consistent answer – is that the PFI budget did cost the IWC £700,000 less than intended this year due to some savings, but just not from the specific area of the contract they wanted to save from.
So yes, contrary to what Cllr Ward said when questioned specifically about this year’s budget in the Cabinet meeting, savings to the PFI budget of £700,000 in 2017/18 have been made.
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